Tear Sheet: CoStar Group Inc.'s Credit Metrics Will Remain Subdued In The Near Term As It Continues To Focus On Homes.com

Traction is growing for CoStar?s residential online marketplace in the U.S., where it now sits comfortably as the number two player after Zillow Group as far as average monthly unique visitors. We expect credit metrics to improve somewhat in 2025, but margins will remain historically low as the company continues to increase its product investment and spending on marketing such that S&P Global Ratings-adjusted EBITDA margins remain in the 10%-15% range. We believe these near-term investments will provide long-term tailwinds for CoStar?s growth profile, as the company estimates a total addressable market in North America for online residential marketplaces north of $15 billion. The company recently disclosed its plans to hire 1,000 additional employees this year (500 Homes.com salespeople and

...April 10, 2025 This year will be another investment year for CoStar Group Inc., as it continues to develop and market its new Homes.com residential marketplace. Traction is growing for CoStar's residential online marketplace in the U.S., where it now sits comfortably as the number two player after Zillow Group as far as average monthly unique visitors. We expect credit metrics to improve somewhat in 2025, but margins will remain historically low as the company continues to increase its product investment and spending on marketing such that S&P Global Ratings- adjusted EBITDA margins remain in the 10%-15% range. We believe these near-term investments will provide long-term tailwinds for CoStar's growth profile, as the company estimates a total addressable market in North America for online residential marketplaces north of $15 billion. The company recently disclosed its plans to hire 1,000 additional employees this year (500 Homes.com salespeople and 500 new employees upon the completion...

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